0

As many of you may know, this morning Robinhood (among other brokerages) shut down trading of several stocks, including Gamestop (GME) and AMC Entertainment (AMC).

Recently, Justin Kan on Twitter posted the following tweet, implying that Robinhood may have been working behind the scenes with Citadel to manipulate the market.

Just got a tip that Citadel reloaded their shorts before they told Robinhood to stop trading $GME.

If this is true, Ken Griffin and the Robinhood founders should be in jail.

If a brokerage were to shut down due, what happens to the users who have accounts with them? Do their shares get liquidated and the money sent back to them? Does the account get moved to another brokerage? Do the users just lose their account and assets held within?

DenisS
  • 101
  • 2

1 Answers1

0

SIPC insurance covers the custodial function of a brokerage firm as well as as protection against unauthorized trading or account theft. It provides up to $500,000 in total coverage per customer for lost or missing assets of cash and/or securities. It covers up to $250k of cash. It does not protect you against loss of security value while your account is tied up.

If a brokerage were to shut down, your account would get moved to another brokerage firm.

Bob Baerker
  • 77,328
  • 15
  • 101
  • 175